KKR and Silver Lake to Acquire Agilent’s
Semiconductor Unit for $2.66 Billion
New York and Menlo Park, August 15,
2005 — Kohlberg Kravis Roberts
& Co. (KKR) and Silver Lake Partners announced
today that they have signed an agreement with
Agilent Technologies, Inc. (NYSE: A) to acquire
Agilent’s Semiconductor Products Group
(SPG) for $2.66 billion, which will create the
largest privately-held independent semiconductor
company in the world.
SPG is a leading supplier of advanced semiconductor
components, modules and subsystems for consumer
and commercial electronics applications with
approximately 6,600 employees worldwide.
Dick Chang, current president of SPG, who will
become president and chief executive officer
of the New SPG, said, “This transaction
provides an exciting platform for SPG to grow
and thrive as a stand-alone enterprise. The
New SPG will build on the strength of its existing
business platform and take advantage of strategic
growth opportunities around the world. We will
be better positioned to focus on developing
new products, increasing market share, and securing
our role among the technology leaders in the
semiconductor industry.”
Dr. Chang continued, “This is good news
for our customers and employees, as this transaction
is a strong endorsement of our business model
and financial strength. We are looking forward
to a constructive partnership with KKR and Silver
Lake, two of the world’s most accomplished
private equity firms.”
KKR and Silver Lake are equal partners in the
transaction. Both firms are known for taking
a long-term view toward the businesses in which
they invest and for their focus on working in
partnership with management.
James H. Greene, Jr., a partner at KKR, said,
“We see this as an excellent opportunity
to invest in a world-class, highly diversified
semiconductor company with excellent cash flow,
dedicated management, a unique culture, and
strong prospects for future growth on a global
basis.”
John R. Joyce, a managing director of Silver
Lake, said, "SPG has an impressive reputation
for industry leading technology and deep customer
relationships. Its strong position in the markets
it serves is a testament to the dedication of
all 6,600 SPG employees worldwide. We are excited
about the opportunity to work with the SPG team
to build upon its already strong foundation
of intellectual property, great people and unmatched
commitment to meeting customers needs."
William Sullivan, president and chief executive
officer of Agilent, said, "We believe that
SPG can best realize its full potential as an
independent company. As we re-focus Agilent
on its core measurement businesses, we are pleased
to have found enthusiastic, experienced, and
supportive owners for SPG in the alliance of
KKR and Silver Lake. Their long-term investing
horizon, technology experience, and focus on
growth make a compelling partnership that will
serve all SPG’s constituents well.”
The transaction is currently targeted to be
completed by the end of Agilent’s fiscal
year, Oct. 31, 2005, subject to closing conditions,
including governmental and regulatory approvals.
Citigroup and Lehman Brothers acted as the exclusive
financial advisors to KKR and Silver Lake on
the transaction. Latham & Watkins served
as legal advisor.
About Agilent’s SPG
Agilent’s SPG, which had revenue of $2
billion in fiscal year 2004, is a leading supplier
of advanced semiconductor components to the
mobile phone, enterprise storage and networking,
and broad optoelectronic markets. Products include
fiber optic transceivers; radio frequency and
microwave components; storage application-specific
standard products (ASSPs); storage, computing,
networking and imaging application-specific
integrated circuits (ASICs); infrared transceivers
and remote control/IrFM software; CMOS imaging
solution; light emitting diodes (LEDs); illumination
and color management solutions; optical mouse
sensors; optocouplers; and motion control devices.
Information about Agilent’s SPG is available
on the Web at www.agilent.com.
About KKR
KKR is one of the world's oldest and most experienced
private equity firms specializing in management
buyouts, with offices in New York, Menlo Park,
California and London, England. Over the past
twenty-nine years, KKR has invested in more
than 130 transactions with a total value of
US$158 billion. For more information, please
visit www.kkr.com.
About Silver Lake Partners
Silver Lake Partners is the leading private
equity firm focused exclusively on large-scale
investing in technology and related growth industries.
Silver Lake seeks to achieve superior returns
by investing with the strategic insight of an
experienced industry participant, the operating
skill of a world-class manager, and the financial
expertise of a disciplined private equity investor.
Specifically, Silver Lake's mission is to function
as a value-added partner to the management teams
of the world's leading technology franchises.
Its portfolio companies include technology industry
leaders such as Ameritrade, Business Objects,
Flextronics, Gartner, Nasdaq, Network General,
Seagate Technology, SunGard Data Systems, Thomson
and UGS. For more information: www.silverlake.com.
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